Italy the Reign Ends

Benetton

The April 12 issue of Newsweek International published an article on the Benetton family, Italians who parlayed one sibling's skill with knitting needles into a world-recognized company. The company has had a recent past full of financial turmoil, and this article tells some of how they have dealt with it.

The company Benetton began when Luciano Benetton received many compliments on a sweater his sister had knitted for him. In a rags-to-riches story worthy of repeating, he sold his accordion to buy his sister a knitting machine so she could produce sweaters faster, and he sold them for her.

Benetton took some steps other small businesses might not have thought necessary. He traveled to Scotland to learn about sweater-making from people who had done it for a very long time.

One of the pertinent things students of international business might notice is that the Benettons seem to not care about market share values. They said their goal was to sell sweaters, not shares. This seems unrealistic, because it is by selling shares that most company acquire the capital necessary to grow and expand.

Their biggest mistake seems to be in misreading how much shock value the world at large could absorb in their advertising. To maintain their growth and expansion, they needed markets outside of Italy, but in the end alienated Sears and other large outlets over their advertising campaign.